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Prep for January 2024 Now

Clark Schaefer Hackett encourages you to collect W-9 forms early

CSH - Prep for January NowIf you are like many business owners, bookkeepers or accountants, you turn the calendar to January and things kick into high gear with closing the books for year end and the dreaded preparation of 1099 information returns due at the end of the month! The deadline comes up quickly when you are busy with so many things on your plate! 

1099-NEC (Nonemployee Compensation) forms are required to be filed annually by Jan. 31 to non-employee businesses you have paid $600 or more for services during the prior calendar year and 1099-MISC (Miscellaneous) forms are required to be filed by Jan. 31 for rents, prizes, awards and certain other payments of $600 or more. There are lots of other informational returns, requirements and scenarios, but the 1099-NEC and 1099-MISC are the most common.

You will need to collect W-9 forms (Requests for Taxpayer Identification Number and Certification) for anyone you paid for something other than goods. W-9 forms include all the information you need to prepare 1099’s: employer name, tax ID and address. They also include the entity type which helps determines if a 1099 needs to be issued. In general, 1099’s do not need to be issued to corporations, including S-corporations, so if the W-9 indicates that the entity is a corporation, you most likely will not need to issue a 1099 form. There is one common exception which is payments to law firms for legal services always require 1099’s to be issued. There are, of course, other exceptions.  When in doubt, issue the 1099. If the recipient was not supposed to receive it, they can let you know the reason, and you can contact your CPA to verify this.

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett.

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